Crocs achieves sales expectations in Q3 2015

By

Obi Anyanwu

Published
Nov 8, 2015

Crocs Inc. on Thursday reported its financial results for its third quarter of fiscal 2015 ended September 30, 2015. The company reported numbers that were in line with its expectations for the quarter and affirms that it is primed for a positive fourth quarter.

Net revenue was $274.1 million, a 0.8% decrease from the prior year’s comparable period. Cash and cash equivalents at September 30, 2015 were $168.5 million, and inventory was $190.8 million compared to $171 million on December 31, 2014.
 
Gregg Ribatt, Chief Executive Officer, said: "We delivered third quarter sales in line with our revised expectations reflecting challenges in China and currency. For the third quarter, revenue on a constant currency basis and adjusted for business model changes was up 3.7%. Our China business is undergoing changes as we transition away from under-performing distributors. We faced some difficult decisions in China and as a result we increased reserves for doubtful accounts by $19 million at the end of the third quarter. We also held shipments to several of our China distributors, which negatively affected Q3 revenue by $4.0 million. However, these actions set us up for improved business performance in the future.

Ribatt added that the company cleaned out its aged and extra inventory, which impacted its margins.
 
Crocs repurchased 2.3 million shares of common stock at an average of $14.50 and ended the quarter with 73.6 million common shares outstanding. In addition, the company has appointed Carrie Teffner as Chief Financial Officer from its Board of Directors effective December 16, 2015. She will step down from the Board in conjunction with the appointment.
 
Mr. Ribatt stated, "We are thrilled to have Carrie Teffner join the company as chief financial officer. Carrie is a great business partner and has a strong finance, operations, and strategy background. We look forward to her joining the company next month."
 
The company expects its fourth quarter revenue to range between $200 million and $210 million compared to $206.5 million in the previous year.